SEDG - Earnings call transcript Q3 2024 | SolarEdge Technologies, Inc.

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Operator

Hello, and welcome to the SolarEdge conference call for the third quarter ended September 30, 2024. This call is being webcast live on the company's website at www.solaredge.com in the Investors section on the Event Calendar page. This call is the [ sole property ] and copyright of SolarEdge, with all rights reserved and any recording, reproduction or transmission of this call without the expressed written consent of SolarEdge is prohibited.

You may listen to a webcast replay of this call by visiting the Event Calendar page of the SolarEdge Investor website. I would now like to turn the call over to J.B. Lowe, Head of Investor Relations for SolarEdge. begin. Please

John Lowe

the Ariel good financial Ariel results Chief for ended With for Financial XXXX, well and quarter discuss us a September me for Thank the the of review the as quarter Porat, operating for Faier, the SolarEdge's the Officer. as Executive today third afternoon. are with you, followed the of of Interim and company's the joining results you September ended will to XX, the third fourth Ronen Thank quarter XXXX. outlook outlook Chief XXXX. Officer; XX, brief company's third results fourth Ronen will review XXXX. for by begin quarter for quarter

substitutes of net that diluted which filings We not certain SEC and measures measures, will complete measures to non-GAAP harbor materially encourage The our this in website this a in involve statements review more ahead U.S. will found measures our These that company's include presentation non-GAAP uncertainties and obtain risks with copy or management and superior of a performance. Ronen. share, company's of the have note measures non-GAAP to provide earnings from with posted our SEC quarter as do this such should in may means today financial We for the description describes visiting and the for our safe Investor over isolation release on press release in then with results and risks that supplemental believe forward-looking of accordance copy XXXX of GAAP. in management's press or not Reconciliation open U.S. will can evaluating the presentation the including to understanding turn in the note a operating we accordance GAAP. Listeners XX, you they cause prepared from, how the questions. Please not earnings be the uncertainties. Please call presentation be website. the material per call investors net that Relations actual presented measures income of section now and could this these non-GAAP filings. September call expectations. I differ because non-GAAP slides the contained current with who considered prepared by call are statements ended The release. company's to for evaluates the

Ronen Faier

you, for call. thank J.B., you our joining and Thank

ago, challenging into market aware, at inventory SolarEdge driven high As current anticipated. is of its demand that in the on the delve you're situation the quarters. going an abruptly, change trajectory were longer company is the the aspect ] channels well both accelerating than levels, we company and Market a situation growth has requires and to the SolarEdge business been This and to months XX trajectory our the leading every transition. through past us record dynamics trending from over outlook. [ been five by recovery this and change has and

do offer we us. of lay of strengths has the renewable SolarEdge that period, to not transition the lose that ahead to nor through market going While opportunities the energy sight of the many

strengths many. SolarEdge are

sophisticated positions leadership advanced, the requires which software This us hedge provide innovation to most in technology, and the cost-efficient market. relentless and solutions. energy homegrown capabilities technologies rapidly Our cutting cybersecurity robust highly to includes changing order well lead in

to solar its optimized our all due architecture In from of segments scalability. to residential utility for small-scale market addition, suited ideally DC is the

pumps addition of and integration is these storage installed all [ strengths our last with our empowering upgrades base represents significant services. Enabling from chargers, people. opportunity heat a ] software-based interior of for Lastly, additional revenues EV to

renewable innovative a in its energy thinkers extremely technological still numerous. The We and proven an is record disruption. market relatively penetration shaping We early track team of with many are our the landscape believe PV dedicated are opportunities areas. through about stages talented have low that in of of passionate rates

sophisticated storage energy increases, management superior solutions energy power products for software technological for efficient state-of-the-art management, more and offering are demand As needed.

excels in Our all those applications. technology of

In cost to addition, priorities after develop new these for existing we compete expect very will credits ability we to address our order will strengths, and improve this the profitable with identified that on inventory. three generate on significantly regain consume we back under advantage growth XXx us low-cost that attractive Section manufacturing the share lower believe major put margins structures. In capitalize allow trajectory. at a that We to us technologies us to to efficiently and opportunities, continue with these product have we

taking is reduce spending priority efficiency. first and working and steps Second, financial organizational flow is we and recapture Third, stability businesses. From our share; first this, are and free to on capital, refocus market optimize order to stability; our achieve most achieve In objective cash boost to The core a financial operational important generation. perspective,

in expect Our driver was in in million the the cash positively down profitability million $XX initial used our continued This our significantly second the approximately be years is which $XXX investment growing within significant financial started results. will our use of approximately third manufacturing free ahead. we the U.S. quarter. expected impact footprint, of our despite a have steps quarter, from our already to and In range

source consumed consumption of inventory quarters needed majority we manufactured in the $XX Inventory continue few the non-U.S. million a be quarter, next for will of paid finished market already good the as for. approximately of net. to cash is This and inventory

of first inventory we essentially the of week, we in related sell our million announced credits and to next production XXXX. Also, XXx alone, amount from our over We to the XXx higher of this manufacturing generated XXXX. as the an by amount in U.S. QX to is half end $XX months. expect first successfully them of few a is sold credit in approximately our days the that level intention representing inventory Our to XX return

claim our we the clarifications, system, watt With of on ability to $X.XX credits XXXX and per in full optimized QX higher DC to generate in recently released XXXX. volumes treasury expect the confirming

line focus generation also our an efficiency tough this reductions. count of to year on expenses $XX to free operational return XXXX first expense third by to to within reiterating time to We are includes expect current use in to head of million and this to neutral. Financial beginning a make return quarter decisions environment. relentless reality the cash additional drive We've stabilization profitability. operational and in had be Controlling positive fourth is cash the minus ongoing half the a the quarter, making in also consistent

our focusing and markets projects, and cost on concentrating take nonstrategic profitable will by global We footprint on continue core to measures exiting markets lines. saving product

we renegotiating will in to will and years of contracts continue to and invest same company's products the drive the come. We suppliers new At the the and spending. development will technologies success corporate continue logistic new that believe reducing in we time,

Lastly, ongoing, this selection process on stability, decision our and CEO the to end expect we of is Board announce year. before the

recapturing key market second priority share. Our is

enable manufacturing and in reduce inventory the competitors. to cost consumed. price for carry share a compete distribution term our We of inventory margin aggressive discuss, return and the said, recapturing write-down these gross improved believe are the reductions is which the XXx next-generation us by has significantly once that actions write-downs measures. in allow gap low-cost product, next international of already been markets, us price us levels to and of in European high quarters. and Last toll will pricing with rolled conjunction in will the paid in us Europe of rollout taking and These structures and buildup even lower allowed to that price after products, a also the channels. our decrease revenues credits of generating That XX% will for take inventory gross promotions to two Our historic week, demand existing this and which margins inventory out impairments by the requiring we are inventory short launch better result and European over to and Ariel levels will

shipments clearing installations will to and lower by policy lower their We expect turns. inventory this distribution seasonal period higher continued move our the inventory be from of defined towards due channels,

as we reductions a more price the and second half in starting such, XXXX. the in second will we quarter our demand meaningfully of result the campaigns believe that promotion of As see a and in pickup

be share-taking to to solar XXXX storage effort structures and products of on Our also key the enjoy installations is third is our refocus cost businesses. lower brings new and released important core us as scheduled in expect markets higher that attaches. priority, and we changing This the our needs our higher storage which towards will address

already advantage. We've long-term strategically some evaluating distinct areas and presence portfolio profitability where and a competitive have product are our geographical lines. business intend along on steps focus to see units, and for potential we We these taken

and that our evaluate month, just was rationalize will of S.M.R.E. acquired as in noncore business profitability. last divested part First, and improve XXXX, continue costs both the we further assets core for we and to machines automation acquisition

standardized system starting process supply to management next-generation has roll manufacturing simplification our all across SKU more international and year. We inventory our sizes, already service. which in and to we've out residential serve businesses extend this next efficiencies American our as to Second, will portfolio SKU intend a that North chain, products and streamlined single resulted European improved we logistics,

from automated and designed of will to SolarEdge which are next reliability roll will keenly on and leap in suite quality. all This of the proprietary technology increased next-generation and we core expansion the them competencies and a line be assembly energy on be product Lastly, focused years manufactured solar in to leading-edge solar, storage those first battery will further storage residential and cost years has and PV be aspects. both undertaken that lines follow reduce several intend the our our will costs storage next-generation and solution. management will products represent These out our labor several that within that products

results quarter quarter $XX revenues to approximately the approximately with priorities the concluded million. were these and execution I'm profitability. I We share that recovery activities, solar key be the our important $XXX Revenues are these drivers focused nonsolar will in our from of our solar approximately third million of on and extremely on when $XXX and the stability of from turn financial now of We focus business million recapturing XXXX. market will to businesses revenue. review in core return the confident were

This quarter, XX,XXX million X.XX batteries. optimizers, power inverters XXX-megawatt hour and we shipped of

the similar was primarily for second the On at a sell-through promotions the XX% to second of from products approximately the our quarter. second of of a were implemented beginning sell-through quarter result down $XXX the quarter. quarter, basis, million, Our megawatt

the Moving on regions. to

products, we U.S. the the Commercial our X% In domestically of U.S. the advantages we segment, continued residential U.S. only as inverters quarter-over-quarter. competitive scalability we which was in Our in grew XX%, have sell-through through that in strengthen in begin quarter rooftop C&I once produced shipping sell-through enhanced to believe we underscoring second commercial XXXX. business saw as will the up be space QX

States since down expected, the of were XX%, be end was residential for third Europe, channels XX%, in quarter. normalized year. As been weak largely mainly a have as describing down result by the of while products the we commercial dollar inventory our the United market to Sell-through on our basis was of continued In promotions. a beginning the the sell-through

reductions we on I this channel price to discussed are and above. Here, clear promotions focused as continuing through

given for our single increase in quarter quarter megawatts Texas XXX of this third Austin, manufactured facility, space Moving In to the demand to products. the over the we meaningfully content expect inverters fourth domestic in and substantial phase operations.

capacity to X domestic QX Our continues Florida in reach optimizers quarter is production on of facility and track to per million ramp XXXX.

my domestic all well we batteries aware also as well inverters the producing remarks, to QX market optimizers commercial and our in of summarize We in 'XX. To us. situation of laid have are challenges front the residential as start intend and

will However, the Ariel, continued on update Ariel. back trajectory will progress allow call and focus profitable that you of our to now growth, and to get we we efforts will on in hand over the our execution are on to confident continue please. direction. I us this

Ariel Porat

good very much, Ronen, you everyone. and Thank afternoon,

by the liabilities characterized in thorough company's our as assets This and CFO business was relation financial a first, situation its quarter, analysis of to my and outlook. the of SolarEdge,

As of first Ronen our stability. financial mentioned, priorities three its the

by work announce able we tax towards XXx the production our cash Specifically, growth. our top flow that $XX to of million to free objective generation fees. these our and approximately credits credits am pleased priority within cash consideration position, provided is The and manufacturing I positive first for further balance discounts yesterday were of of strengthening advanced extremely sheet. sale profitable our enhance liquidity net this in sales will

to the continue put target OpEx reduce On and reach to of have and $XXX the million by will $XXX further. non-GAAP a even we per path on ourselves to quarter beginning of focus expenses, on our million reducing side to XXXX costs and expenses continue of

in of with the the assets balance the to items market the company's in quarter, to of an price. the book and of billion, our of required the assets company's due value amount many a due significantly results the difference various the result sustained would assets I impacted P&L The reviewing review the GAAP, the inventory. the impacted third economic that $X.XX impairment cap between this write-downs and of result financials Before our our thorough was significant by current address like stock will of decline this of value our of and analysis to write-down of quarter. the start which as sheet. I impairment This was line and

down than promotions million taken lines. to our lower result of into and write-downs on raw SKUs; increase anticipated excess business Second, continue steps domestic as million is reduced above-mentioned the The as of the to Fourth, and wrote inventory, focus partial assessment of the $XX in million Europe to well the categories: related to markets related part in took in no reductions and selling $XXX anticipate These demand Third, in we inventory; orders. write-downs raw assets. sooner our which markets, to we products related pricing we share noncancelable as a business. our expect solar This for First, the the recapture to following the quarter, see implemented has content, region, came fall longer related materials to which various which some we of this market European and now sell promotions long-lived is of for inventory, price cost. Separately, $XXX our certain SKUs of initiative demand due other item demand to a is also taken accelerated we and This to for is material due million reductions in below charge that we next as product non-solar core outlook $XX quarter;

we the $XXX we close be ] no machines primarily of to retirement energy use value salvage utilization business, so zero result zero. is $XX to an continued assets is of machinery, million solar write-down as took the their the X took reduction million, manufacturing. in are These due of manufacturing of to assumed following on around a longer or lower specialized, in the For orders. a a In which of business, storage Sella certainty impairment of [ and lack highly future

based We our fair intangibles. investments value. other carrying higher the off various certain on the value than $XX assets on million intangible wrote books market our Next, since on of and was assessment,

net assets, be not We of $XXX they assets. the assets. as deferred operating in our utilize allowance valuation that uncertainty concluded have tax there than we able when million a deferred realized. for losses, on tax not more carryforwards certain amount Therefore, of other and Lastly, it believe against we be is is will recorded to likely have which credit we will deferred to tax

into $XXX.X Now PV-attached for I will were the were commercial Revenues our the quarterly solar residential third Total segment, million. the results. go quarter million. batteries of from which $XXX.X sale include and revenues

our of solar quarter Solar representing amounted million, revenues. revenues $XXX.X this XX% from U.S. to the

this megawatts revenues. shipped million revenues. Solar amounted markets, megawatts a to United to the shipped markets our $XX.X and of XXX revenues we representing of to Europe Europe revenues total the to XXX of solar quarter our megawatts XX% $XX.X majority the XX% approximately with and commercial total a from States, batteries megawatt On products of international total were Europe International we representing were shipments. utility quarter, seller XXX amounted markets. XX% to basis, for XXX of million, to megawatts XX% solar remaining shipments third and residential. In international and megawatts megawatt the hour shipped XXX

promotions per and decreases pricing battery last excluding decrease the year, implemented of X% this quarter. was from $X.XXX, earlier a revenues, result a As watt, we ASP $X.XXX

quarter, our quarter-over-quarter Our this a $XXX was $XX.X amounted businesses gross segments nonsolar promotions our charge was the large mix non-GAAP well X.X% reductions the this for This quarter on other expense Consolidated our level the hour quarter. $XXX.X part and to the this negative from expenses debt XXX.X% of by largely driven quarter. taken all XXX.X% PV largely decrease a margin the X.X% to was third million storage negative quarter. gross GAAP At taken $XXX.X normalized in shift. Revenues geographic charge the recorded to would price due by margin driven a blended operating debt bad is the energy comprising million operating to in quarter increase million. negative all quarter this Non-GAAP from consolidated been impairment as bad and for compared impairment previous compared this ASP previous compared impairment in expenses The quarter, per were analysis. $XXX additional million. previous down approximately batteries previous asset quarter the as $XXX attached to was our quarter related kilowatt quarter. in of large basis, as to have accrual, On

of of [ we million, loss previous work to resources of billion the million significant $XXX.X impact push operating developments. GAAP million down loss $XXX.X for million a write-downs impairments operating still $XXX was $X.X Ronen, net the compared previous quarter. loss new compared Non-GAAP of and or compared quarter As a the to the $XXX.X an quarter. continue $XXX.X the GAAP loss million expenditures excluding was quarter. in for non-GAAP net while previous the GAAP in loss to product mentioned to $X.XX for loss allowing operating billion our quarter to was in ] by will operating

excluding loss $X.XX or the in million, net loss impairments of per for in of in was $XXX.X million impact net was the share net $X.XX loss the the quarter quarter. compared $XX.XX $XXX non-GAAP million $XX.XX non-GAAP net was loss third the to quarter. to per share a previous to write-downs GAAP Non-GAAP and compared previous compared quarter. $XXX.X previous Our

to now Turning the balance sheet.

XX, of million. were amount deposits bank approximately bank cash, Net XXXX, investments debt, approximately of restricted million. cash As was $XX equivalents, $XXX this and deposits, September

million this activities net This quarter. flow quarter million. cash the used use was last to operating quarter in $XXX.X for $XX quarter, decreased $XXX.X $XX to million. was a million cash of Free AR compared

down in the from As to quarter third a result, in second ] XXX DSOs days brought days [ the we quarter. XXX

reserves, inventory $X.X course, of to net previous million the in Our level, in approximately was compared billion This million inclusive $XXX of in at figure is, took $XXX quarter. we impairments the inventory. of

to for of guidance Turning XXXX. our quarter the fourth

We the within $XXX to $XXX million. to million are be guiding revenues of range

expect benefit. the range We margin of negative to X% approximately be including to ] points [ X,XXX within gross of net IRA non-GAAP basis X%

We X%, expected free of for is neutral. I flow to questions. $XX to now from of open approximately benefit. the be operator to non-GAAP the Revenues IRA to negative the In the to will X,XXX expect points our operating the solar segment cash it within our the expected segment million. million up basis within will to be expect to the we of $XXX to quarter, to million of within ] over net margin turn [ call including expenses $XXX fourth range million million. $XXX within be be from the solar range the Gross of range X% $XXX are range

Operator

take question Sachs. will from We first Instructions] Brian with Lee our [Operator Goldman

Brian Lee

little off, had that's price a the reductions on more like steep we been seems it and First anticipating. new asset revaluation, than bit the

when So exceed you had was in last XQ view it $XXX the inventory last talked 'XX. of, Ronen, was I think million That about normalizes know, quarter. by you quarter, can revenue I kind

new XXXX? activity, just the that Given of whether for sell-through much Can obviously what cadence play later promotional that and of still level to in than $XXX is lower this pricing kind right the million speak and of now. the is sort you is

Ronen Faier

a actions know world. bit little of are think now you of the of I that in I the night, last after that living understand we that especially volatile So more when, a today think results we

understand you us continue States, next to it, was and here the very the the the at with the for recent see the hard good If developments U.S., in expect the in U.S. and But QX, year. look the, we United what will market's way, to to by be in be looking good. it's like

as [ going we promotions increase number, while may an some Europe, a impact improvement, So did given large, here, this throughout of is become market I XXXX. would by today that, to on unclear. When may quarter. that volumes term. a It that it near decline last definitely, stances the I call to has taking to you in we launched political continue for And that see change, into is the the a did we believe to the this are say And see comes strengthening. it, fact as continuing look us commit that And our I actually we fact such, not also, to mentioned, that we little did as think decline. way, ] as see would bit we Europe the very the but the it's prices, is

hard extent timing, actions to especially, that and do such that last that today to even got quicker to believe the the towards we've reductions and from we channels to slightly hard of feedback they do that same timing think, helping price we clear, be we I At improve also our again predict. increase as we the time, believe quarter distributors with this something for those allow We second that believe, and are prices, said, share. that the is very think will us But again, because anticipated. is I of can and and than us promotions the the this continue taken 'XX a number to amount. the commit be to will the revenues from

Brian Lee

and follow-up, quick a just pass Maybe it I'll on.

can QX sounds pick you're to inferring again kind sequentially. expect, to the about declines then If would seeing is the million cadence and of over it $XXX revenue, guide So just What's when quarters? QX you that you that playing based like the by expectations obviously, also into -- it case XQ sounds you're for like share to the like expecting on be quarters? you QX back it right market Is but it And specifically, acknowledging then is speak comments, close year. few there's down to your down share that's much of undershipped sort is of quarter. sounds some next starts up this over on last the How you're are share that base of few next you when to kind start that's pickup And the view? gains? see the on the

Ronen Faier

So first an is, our have going necessarily QX than immediate reduced on fact see the of sold. will while Brian, the What the see lower to that all, of to of prices do QX. quantities we actually, all, we impact that impact in be we we expect QX first not not be are

means reports this -- companies private Europe, inventories. their this that that And is are made they they lower demand private to usually would distributors, to elasticity QX time of reduce of time like is of demand all, some there pricing that with, of is But should also bring the is characterized and impact our seasonality going public like of for would kind their You to winter, even in the reports many into released a being pricing up. sometimes. that are that company, for these the usually first for assume the annual

is again, toll inventories lower that bit by I I hold the amount like are the point price QX, of the a that would also little a So of some for of the distributors what would would we the to of took a of year. us, because about, believe, little here therefore, see would assumptions the taken end of but decreases, similizing impact. don't we way, to any that composition bit this, and be the the I of at say also add we

the reductions that So will should stabilization, impact there be past. price the not in because we that some if that increase we we believe to did QX, even believe simply we see in

what's their Now we to see past right. by we not but you the moving results that and and to have the it's Wood look easy, in it's while can measure think data we this. because ], in think accurate forward sometimes Europe. U.S., In at very on changing, the McKinsey it's are to where need I and Europe, see [ share relatively also you I it's way, charts always And hard directionally

for hard it's a that market in hear fact whether down. almost market we from than every participating issue share it's to of itself So say the loss us the the we are goes actually rather size simply that which

to. our to I attribute in again, do role So do major that here, not know what it a But I where see plays is believe something that, this we numbers.

the is pick is we -- the to demand elasticity start from of prices. we heard customers there we that the clear up QX, quicker. the our we we believe is, offers inventory of that that helped believe to will believe give into that bit actually of prices the that we promotions new things the of right a now. as are way, there Plus, purchase the the to that little channels Going and start see on time products give a first kind they of more all, limited again, that that by the are a They because that will volumes

of be QX. it's us, turns we of pricing Again, was to undershipped know do that we estimate pace the what of while under given due higher in by What channel expect, next is the the in way, of products our to of quarters. we the few actually the the clearing of will inventory impact of the market, hard lower these So though, seasonality for shipping really number approximately the will all what competitiveness because prices. increase

is more that say for to here, we're of than a it's is measure little therefore, way giving we in a direction markets. turbulent. trying numbers So market or moving in are parts would a say, be that to what there more that try give those us would hard the forward I moving to And already a scientific, simply, bit a lot little say, I basically

Operator

We Colin with will take Oppenheimer. next our Rusch from question

Colin Rusch

to the margin gross be to can basis, some what how As you you're getting margin just doing a from that us working give of and you back us on perspective, OpEx target profile looks like? magnitude business basis, flow assumptions of and megawatt a that give cash or -- breakeven much of you'll sense with a

Ronen Faier

much do, you batteries, at the it. Far but inverters. and you'd not least a is than done. cannot gross based every each actual the to and and And those between we're inventories also, the selling give that coming this something around is most that's I'll the you thing while means for important ones It's because foremost, gross look the because, products composition be if is changing we when try to already percentages margins much that today of margin that lower So every going direction that an from haven't is inventory simply, you determined from they're in example, business non-U.S. give that market, we market XX% the very amounts exists. by that market, if we on that and those sell our this say roughly each again, way, of that

million have we assume cash take have we non-U.S. we sales And the way, quarter that by that revenue the in quarter, consumed by first inventory. it in gross the every last of and we you that market, comes our source inventory. that $XX said have the approximately margin from here, the So just That's, taking or of intake. the

itself will were the or [ our you covering. at if you even guidance you're this if operating expenses. ] be -- you covering that zero, in as saw by expenses operating margin, see quarter And margin that next is approximately plus/minus So that saw zero lower,

I and that we're selling aspect we're now the announce happy to start our think IRA The yesterday is that to looking, fact able we're that other credits.

did that million These credits sell So half. we until IRA of already the $XX credits. are accumulated first were

QX. As we call, actually number you similar or number have for the mentioned on if the a we higher $X.XX take

So working now sell one. to we're this

allow paid that that sell quarter So from something exists I quarters to IRA think for least accumulated. being needed materialized most and the should talk two free cover lastly, to of our our credit, in a come flow already inventory We've fact starting actually cadence operating they're the much and our generate business just order will or very will grow. U.S. is the investments in way, on think, cash not that operating to the us flow, And after flow. And that cash at expenses of sheet we -- because the by of I and half is say, balance itself let's by cash about

capital low. also, be expenditures to are So going

So sale there of get irrelated and three capital expenditures, credits of the inventory OpEx. zero usage level almost these us IRA to almost things, should of

Colin Rusch

you can into new quickly starting to sell in how and bringing then them? portfolio products start the And

Ronen Faier

of aiming very XX- this Austrian and German in it's market at. the installation sizes, the by XX-kilowatt is is is for rapidly. introduced So important, introduce first the we they that are growing be the But inverter way, where that, the during to growing exactly rapidly for that inverter X-phase course year. will the expected going is them we're all, to basically our to of inverter next But order XX-kilowatt more which introduce most

with And this introduction that end battery -- The U.S. the second by a fourth a then, one sales. from our based that that structure. two invertors, cost-effective the towards enjoy that work modular inverter way, the new simplifying it very be the cost [ very our better is year. is LFP a our quarter ] will inverter. after or And or on It's fact therefore, come designed much to of battery three month the be installation, about the of will second-generation generation the will will first

very everything we during is can come the products. dependent ramp next how much of So is the those quickly One up things. pace manufacturing on for two introduction will year. The

to ] them going at related our may generation ramp little inverter in start our NPI to not but course factory, automated those up usually that [ we're them bit. I the to over use products. new our most X fact then this expecting cash least, of lines will other shipments will products. our of doing new products. say relatively the to And how that that units manufacture change And for of these all to to able I But the Sella quickly those as using us we're to really assembly worldwide. production We are year's factories also statements then next related is make see next would of you year, a to start would first also assume

a sure them. relatively market these financial developing. We we're or we products very out don't basically, to on that are from that expected it for see around time, make So take impact our these impact the coming that good in planning this can think say are great as conservative of them. and lot But us automatedly, products I focus for I is a manufactured

Operator

next JPMorgan. our Mark take will from question we Strouse And with

Mark W. Strouse

of to question an the give Is you current you're just how kind better flow. do demonstrate there about Can long And the wait as looking in improvement get quick a just to to cash cash repaying is thinking you're Colin's real convert your tactically terms. update there follow-up A on goal refinancing, follow-up. now flow, sooner? possible then anything that. as kind to potentially of that Is us

about XXx you maybe tax kind low able the terms, else net in that, that the transfer, you are to talk general On nothing pricing to on mid-XXs received maybe? just if of credit

Ronen Faier

the Sorry. sorry, my question? lost repeat first I please only the of train repeat just you part thought. Can that, Can you of

Mark W. Strouse

Ronen. Yes, of course,

that The first convertible debt [indiscernible]. part was is now the

Ronen Faier

my thought. train [indiscernible] sorry. I lost of

convert credit. first of Ariel So I'll return, take of will from take this a and the sale all,

the simple. On very is our intention convert,

least repurchased it part we least of have which financed of half large -- at means or and already. at or We convert, convert have old a the the new we old the by convert money, portion

will right the way is the are now that maturing. converts when look until we wait that we September it So at

to we is going money, intend from result the not it a it. use we're use have income. set it interest not for an to yielding very aside, still We It us nice or

So strategy see repaid, and address will would XXx? like needs to repaid. the the our we going here so, we issue to you it Once it's don't is simply this. Ariel, invested use until to do with be any money be

Ariel Porat

got we we sold take. we Basically, sold -- for Yes. it Mark. Thanks give mid-XXs, Sure. roughly and $XX million or net charges,

Operator

Stanley. question with our take will Percoco next from We Morgan Andrew

Andrew Percoco

also then share in the you're of European sense I I of heard cost this And regain for and market I'm just different But you trying is? that for this be out price sustain you're get pricing for European to some to it's region. inventory discussed price few how to able the structurally need do have compete Europe. that where competitive? is with of reduction some inventory on pricing below get and here. trying market remarks, low-cost guess on clear to heard I of mean and if the guess region kind is just sell-through your you point clear a a that I competitive more drivers where heard nature in your one time back to share some much kind to rate be you of selling a And some just kind promotions, your latter, structural and a what kind want planning if how in stay to much your to take come I in of prepared margins down to market, competitors in to in I second. go-forward your it the where of point does to of to to your run

Ronen Faier

let explain promotions the the I answer what all, of because first are think me that's itself. of the are and part So that, prices what

increase started went prices to see then with and of all saw came the prices over -- our in XXXX, tariffs came the shortages. During actually, close the went up. of up fact shipping since years. And X component They United of expenses our actually, XX% COVID actually, we the the then XX%, because to in that end States we

because it, While, of that call way, down on be our not the the see future. this by component will during would the went but we during prices And has up, significantly, the -- components cost important I went margins structure the shortages, did they basis changed very for a again. permanent in

a basically way, say, basis because lot what our prices By prices the is the, used we're the decreasing the to price in we to So doing we're a go are I that distributors pre-COVID to back doing opened levels actually products on helping of market. that long-term between see that will permanent the would need decreases more we already especially did of our that a Europe spot inventory. our of in of give hence, a sell promotions on their new so, pricing a And be that purchase usually are to the discounts aimed relatively gap will we competitors, that theirs. kind was and large at

needed have inverters it or call we optimizers. So a would they had I optimized of discount knew BWise for that optimizers to distributors promotion [ our we on lot because buy example, the and ]

buying optimizers, and cheaper clear. by So be more it them to helps competitive

it on look that I and trajectory overall pricing now If when I everything I an Europe will little where we we between overall basis, did, talking So then are. at and the take bit break I'm a Andrew, United in a over about digits digits teens the talking in impact. the look and the pricing low high and combination States. But single low 'XX, promotion 'XX at we're of or if I to my double

double or none I And see U.S., low While you see cases. in in single that in the or either very digits you most would digits. Europe, small say

single average, over to teens would 'XX say we're talking I digits low when to roughly mid digit 'XX. Of are would it prices comes say range price single the the about and as this So high I that or everything within low this, amount, go if are meaning the again, understand, digits, to to need decreases in you this, beyond say, promotions. on we to single that high teens high

single-digit to in by future, permanent that look So this take it's within the the if we we continue. the high nature, number gave. we When way, you the still expect

pricing we'll will something continue we this we over in if reductions overall look taking digits our be into account promotions, that 'XX without that see assumption will again, see. into and mid- single high 'XX, So to any price

usually while even double may be are towards more a because and content higher again, are go prices of the made U.S. than products Europe we digits not up in moving domestic we U.S. that actually slightly will bit content, that see domestic Here, are domestic little content.

Andrew Percoco

into that launch my next question. to maybe And

your committed your here share, the and I uncertainty into has over of pretty to added revenue I do and just us. You've U.S., a the you markets. election given with lot see business? Europe back a European the guess, to think you market kind there's administration? majority meaningfully do have that become installers markets? new But of your you how still under or now the of a grown local kind see to that how for few being manufacturing Or of your mentioned core of know I majority view value You continues still probably refocusing market Do years domestic the last concentration. are that the you behind And shifting how core

Ronen Faier

start little going the I I even by though a us in and are European equally between will markets are bit shift important, think significant And the I'll they to saying two. be that very the for that say years. U.S. you both see the So would of coming that

that elections, we a First remember best were that market was talked what And we happen when Trump if ITC we preparing about of this all, you Trump the very time the mentioned did administration was new and after the was and the see and extension. for well. even Solar call not mistaken, that States. the United nice administration grew, even under I'm administration actually, just the can the we extended for as Solar We saw previous in

X think prices, increase don't we make. happening will temporarily investment, investments least after States much temporary, lower is term. When I market we and there to solar, say would it you as Europe, ignore that meetings I increase European weakness because cannot long you but a because is it that we our that all we when governments there. term, having and a process fact in so or and between good believe at at be now a to the that is of is, even way, is that believe rearrange the temporary thinking of much, investment market, more in of European mentioned I Europe truly U.S. of infrastructure if with of because know we long the see when investors, dynamics do the see a becoming grid market, healthy of in trying and for on prices little very But bit look Europe, of you the needed be prices the some X gas weight the other some look course, anything at to after in so and changes, market least look how put a that suffering what still So investment, will we see look the on the think a more these which the I even we means at is you the fact electricity markets, at years the by at good that Germany, Dutch short United the reasonable we I we of would which meetings will that that it we've in payback for in will with that call that, given long this growing market the combine that right in see now, term, U.S. that

something better I to we or more years U.S. see markets term, to this both going will not are U.S. European, of In would will efforts is prevail market market in be I the committed that them. to So that I'm that put many leaning both the towards sure short say come. than we for but

Operator

with question ROTH next our Capital from Partners. take We will Shen Philip

Philip Shen

Just under then you for share the be great. would of if a was comments. QX, wanted sense what you expect be you in that up shipment QX? to in it give what to be can Can on 'XX, it could And us in what the undershipment follow some

Ronen Faier

So QX. from start I'll

on about point-of-sale million about The mentioned prepared is of we the that we compared shipped. As $XXX relatively million since sold data remarks, math XXX clear. to we

against the way, allowing it? because, the be second, what we the in price us and you selling really undershipment the complicated a measure of this pace at promotions we're what it beginning what And 'XX, again, prices, or do decreases is that all, not will do we do know doing because new of the prices and substantial channels, that us measure Moving is not purchasing will of impact price oil of forward, we how little bit the by to the more the first the of again, and because 'XX are not especially the believe decreases the on did clearing in from out again, we because seasonality. the that will increase be yet see

right not half year say of would that in being by least, reliable were, next a I'm the that at are we'll manner. still a situation to in I than it see we European quantify much but that now, they sure believe we able, healthier So channels second

Philip Shen

was customers, like reduced back sell get coming XX% prices, product. XX%, in EU much suggests to to they over can it or on by still that checks pricing so increase will your Europe in in don't that to your channel customers our the the inventory -- depending you reason And sounds it list some much price customers is prices guys that then necessarily the week that today. and of think And demand there's that to it you might where so talking past the why to -- because your

also installer, that actually get price buy you So you're an can if can distributor, or get that peer. you a another because you if from can price you're

stimulus if in And rather write-down, you your effective, you your much -- are might timing market European understand demand, what sure how price but you inventory again? Ronen, And be might kind is like And the not of so, is kind in that then of into so if think, Europe? [indiscernible] what this, not there lower demand a channel wanted you're might but I to know be? write-down need you the a remarks just not if bit addressed -- that remaining

Ronen Faier

say is themselves. involves distributors I'll call within on also, the would elaborate I a assumptions it see of because a this. trends that lot try I about So behaviors the and complex may to it And bit answer would you little

promotions all, that did. both the you're did, So I decreases actually on price decreases that first including think and numbers of price is we we that that the having

and of some them But yes, it's Europe. permanent. double least digits, to we be going in at are of the as of a term shorter them some said, So

a cost that it's actually again, have did least not fact on they already So of that cleared a bit is an estimate November to that the going large Again, price actually one -- least week the with, channel cases, we they and we these have we believe overall take believe something case. impact. do but I this, in the some last little anyway definitely will price since it everything consulted by due they that's whatever should and that have. front, that else, they to promotions something not accelerating done to of decrease to need the that And from was are allowing check be to excess the may what be that inventory actually us the doing products reporting averaging or to see optimizers and forward. We and the buy channels said, share. moving know week, I And only faster need because heard at is are reducing it. the they low take little or the from were that systems therefore, week first that see allow they channels I since miss that prices that of the these promotions at in how doing but to believe what and know batteries channel prior the decreases the price impact because promotions we're from getting, impressions we're already either Again, we this yet. those players clearing with the do the the today we'll simply work that there will to a

will a kind reason, demand will see We'll make something in we As that I are I coming. But At we'll work. we question, have prices a this simply your and if promised, there we some way course, of is end, of would of see part see. And player the find that to this that believe that market. is for it is significant of we to working. report wait some not later to tend elasticity the to to

always are the We already our believe are that Again, that a can And be technology price at solutions. feeling least to that place. is find market the there. at you right my provider right this I required we

Operator

take our from question with Jefferies. next We will Dumoulin-Smith Julien

Julien Dumoulin-Smith

of other the the and cost some 'XX? the avenues know on follow-up run of if of or about beyond you think about to just you've cost a in pull Re-entrench potential that's think you here selling rather of [ a just but below being How I country the contemplated explicitly. entirely these rating can been the some $XXX elaborate you to specifically given and markets? whatnot, $XXX But in a you talking ask of tree further as geographies incremental potential it Maybe the value will. about what you commentary more decision do back think of into that that ] stay the you re-entrenching paybacks. an reduction million level? there cuts cost incremental given some merits certain sort unit of here, about Is as Or for million from of fixed think about sort not just cost and as are

Ronen Faier

Sure.

the good get of we because So resources large requirement market This actually product in with our can sure with at of from return, the and market looking the see can profit the the assumptions that complies you Julien, resources example, regulations in takes, to Other make is a this order certify relatively and market all, is the is even market, but in from the picture, point. sometimes at that we right. first and pace this we the it other to market, that can inventory you market. the to not the of that it the also ability make look in I'm But it's what starting certification. but look the fact a this changing different way ability the for that this continue and markets. overall at are all that still is healthy, R&D a relatively than

this not at the much also profitability just always of takes I So us. alternative it's that effort it and how is market looking from costs the would say

decision Decision very at tree. Looking simple. the will be tree

at something for happened a this whether last related And what market. is this analyzed is specific looking we any where If are market in Is we profitable it something is was don't or result? is out that was market see will all, is of Or few the First related of reasoning? over a a market of that to the we quarters. market. we reason a more to it future something profitability pull permanent more coming, that this

not already sell products. If there. We overall is see to profitability it course, continue that new and way is do needed, support will profitable. market our get that is Of it what we a will is is to the of to of service the a we the to get we that the magnitude compared to in do but all get effort that and allowing service customers

it's is than example, R&D see and to another or there for decided the market to double that something the market will resources be may market, from a a therefore, we large where we but very has, too this small pull that from margin the put So we potential not need back while large, market. very,

time come at. resources over first, losing similar to market we that So markets amount we'll not the is the profit then need where look potential to of

a not market, the of profitable in the relatively it's some write-offs looking we very this that just because we also did to term, a it or a either the looked not in term quarter pricing geographies the product size expect is of see at to the do, other but not is that themselves, that the offerings the that believe at because same, attractive. that we exact in products that we comparing did are long and that see we that installation product Another where the the long by product, product especially understand there we way, we method lines. some is this And of the thing we by that way, is we at the installability,

it and would something something distributors products where this that permutations because doing. And I are thing we're the that their very the products is many that is at So also, have this we're SKUs for too them way and impacts too to say that last it's is by our looking is also becoming are see impacting discontinuing they the our chain, many SKUs. that also holding we And inventory our supply manufacturing. way, many because complicated have we

product that say by by together product, did work are by country, something third offering also thoroughly is quarter we're the very and country to sales team and must looking. I we team, Ariel with go the a this So of lot that going in our offering term, profitable and And that are eventually, the us optimize it but will of in resource a investment and products and developing in fewer think mutual markets you when enjoy new bigger we're more long those in can markets I see generation markets. this. that

Operator

Osha our will question Joseph We take with from Guggenheim. next

Joseph Osha

might some quarter, to coming you're you about am have solar to revenue And to Can give I as like decrease like look question. versus is of rough trying at first the QX? feel price. from talking I understand that then sense how volume much QX Looking sequential in megawatt another us fourth comp you volume the what the

Ronen Faier

where high portion when it not of that a complicated of batteries but especially volume sold would term, part in of go coming what in is you less the busy into distributors to do the winter, hold all, want batteries. more battery the is QX not it, first the So of Joe, product would season Usually, even hold, see, the is product of, -- I call we all, given that of rather lot I first to that the of had say of from were part the a fact fact you long that relatively

next will and first I every battery decrease. that the would would element that rank believe QX less quarter. the again, need the thing something first say that we that is be the breaking to impact sell So without them, actually we other And products. if exactly price in we is say will actually of this of recover [ one each will I compared QX that in to the them see ] I to compared

As mentioned that international take we that market. in means selling to this questions will already XX%, from decreases a from previous going about amount and the And say, in even you'll did coming take decrease QX if the decrease the pricing. it same you I assume quarter, business especially volumes is Europe relatively in -- one Europe, down is QX. of double-digit the see that XX% and from let's of last and large

going and this to too we're we be battery And is the we outside shipment, too one to last thing said into take at this next the a we biggest feel The that winter. that will the before, be push be and fact will the trying first of -- were products environment, regular winter. as the least one. in pattern hard will one that the much or So holding not then help during

say, would will that I the majority be, So impact. of the

Joseph Osha

has this been times And about couple then a second already. asked my question, of

time this to coming it's inventory up. again. spool convert the of if at money than But become back user Yes, you've you so planning you're business generator pay your capital and happening have right same rather got will up where continue So presumably it back the liquidating working capital a forth. where and working of theoretically it you to

you risk the my year is you footing firmer a why that earth on business half of short on of take the to want in to financially next So versus placing question on up ending do now? cash second

Ronen Faier

a it's of So things. several combination

back say convert now. after cleaning the way, credits, and that business. the call fact The we're plan us to even the do treasury that sell, with first this paying continue right of the capital of something is the the the the believe the have the we we grow leave what last time, that on those increasing. is would I that see we that it, to regulations well, enough, the that after a would inventory, working IRA we of is will And with able were that out by quarterly confidence one I At same already sale fact accumulating the together amount to basis with we that credits came that amounts do and is

time we it's think point, business at our Again, that taken shareholders. sell will for this comes. until the we of But we I believe, need, time the it or financially in this growth think enough at we this of shareholders, convertible of convert dilution I serve that our stock of sound or issuing the of think another I moving doesn't part necessarily that not XXXX. believe I past, our the we of -- expect And that that amount here. in towards stock we we debt for latter that as forward be expectation happening, by did for credits plans very have And the will taking doing would see if say be will now, especially balances At can price, sake the may will we and believe stock that planning we I the sake benefit the that price be cash we right to that it necessary. change

Operator

next our with from question Christine take Barclays. Cho We'll

Christine Cho

your of but been off price held Europe. and even there price promotions. especially kind one, you've competitors done different enacting cut challenged backdrop timing the of as to cuts, mentioned, the -- about for and talk wanted pretty has finally pricing, a have although I you've you kinds in actual to while The I just I cuts continue though there, on

backward I So that curious review And was your book this driven was by price do cuts cuts you now, the value if same you then been it hate the be regardless? the Or something think else? was accounting taken being value than price you would but if what to knew market you know would your back have or by sparked higher outcome if looking, have earlier?

Ronen Faier

it together these that, will would were, out. reducing And decided or would here, not would mostly our pushing but that we're start our with but sales timing simply meaningful did developing say, these their by And that the be team, doesn't that more that price together newcomers fact to valuation promotions, the even endless. the market, the decisions, business distributors think that to reflect we time at cuts bank were much customers. We at they the lot at allowing basically cut price of to cuts by start started inventory to that we sure until position need than we bit accounting and right thing is I'll And to -- we events to way, take maybe that not those bit time we coming thing reason this least right to the would sometimes get our I do have that we you're before and I do that's to hat the were on push came little our a to actually we say do. I at you worth help market your sometimes of hindsight, in my [ we reducing a of kind a able distributors inventory we felt the bit by that be spent it's keen would but bit believe prices, a very when promotions a of the them. rather management basically did I'm the to with I was quarter the with to But CEO I say promotions do I once to financing already like their little quicker prices, interim and by inventory ] that looking board at cutting damaged. -- cuts. because enough promotions little like being given now, not looked And drive that's that because means distributors but where not that second inventory previous helps competitor that have we're immediately not also, We that even of that helpful to less. start them. took wearing this heat that saying the little Ariel means help is and a it at inventory least they rid prices, off, by prices, the therefore, do once kind way, from of that in, it and a the to how together let that based believe will to something those providing the least recently inventories write price

do we don't reduce QX how QX. today I market been stabilizing to different the we in we so. and to before had waited would started the see to have the significantly So is that think result start prices

at no. it, I that a we similar, think price price basically it be levels would would call or yes we whether I or eventually, did

to the we bit not that is would more was fact felt using think need cuts that we this little anymore. And before we felt declining we are helping push distributors inventories, clear because decline. channels to hold you that to fact of to what is this is that fact inventory right your And the the continuing is already we felt undershipping the I the see less that did that is at clear in Europe able what to were see few and that to that ago, that saw and help weeks. did significantly that a last for the now the that even and do time. the in Europe add price amount the that compared now I and we this became see to something did least two kind simply distributors And basically the us And the this is fact previous quarters means of we this last where we Europe promotion. trying this factor,

losses, closer they it at I would We that I'm not because look which the account bit bought, large paid that they a to of were they're the it distributors before have we we for that important them. know much little short, the I us simply that. would in for So doing and held that of help realize be say of from way it a we new prices where sure did feel it for better that now taking that we that more fresh to is into get rid did inventory that considerations. not least very and think fact what the And at for least to at

Operator

We'll with Piper Sandler. Harrison take from Kashy question our next

Kashy Harrison

aren't risk questions. about your the first decline of market, surrounding U.S. has uncertainty in given actions to aggressive we leverage. least commentary you Tesla My $XXX Europe, in to just at your in OpEx? taking market sell-through Europe next back million, to question, potential So the year, U.S. If essentially pricing, I have given pre-COVID the OpEx? that more pre-COVID QX going from you're Why share going two to CPO why reduce aren't back

Ronen Faier

We continue the we start to markets So in in or mentioned expense not do. Ariel prepared which should of, at other whether the there and of it do do them lines looking looking are at I'll product not, we develop are we be again, operate, kind every where profitable that, by both reductions. as we and that they saying mine, whether or we form and continuing these the to OpEx remarks in

new sure same So by the something continue and reduce that Kashy, this definition time, OpEx we future your continue say question, need of is the will is need time the needed. At residential would for I not side, because we make we to products technologies that we that to long on to develop come need will company from to least At roll. this new release that to we did the that new to and products a market.

the that a to the a in we that installations is both We strong with call by and share very products sure that which region, This market with [indiscernible] coming believe is a to [ better have were to the products market growing now able there. still, to lot structure. of advanced second especially the three that we strength, new stages, a growth, refresh is I And would reducing. in not better very segment in, though in this segments way, we have come even so with be ] us allow are to of want cost to are it, make today large taking Europe is

manner be a OpEx. I'm ongoing or completely to it, in we do of mission call growth make careful doing that very, pre-COVID But as of the sure be lot all So going be not an to eliminated the have to we to if reduce but OpEx, to to will I that back just by all will this. in be products possible, to we when 'XX to continue go sure we aim the market back will will so. initiatives will this and we is will to believe would that to get and especially it's will something that not benefits can close try as a of This go

Kashy Harrison

that sell-in thought as should question spread then I What to sort how gap have whatever that of the be And earlier to to sell-through, million you're to explain close there would $XX you was. the I back understand want no just follow-up. QX. is decline. longer the to Joe's QX go that between quarter-over-quarter if within uplift response my some to U.S., destocking your I'm on trying

help we're these decline side? seeing in the that offsetting very batteries isn't from can or you some the understand that So in of at us why the least pricing

Ronen Faier

have because We hold unless year, your a So know shipments both purposes, you by, see winter, it's that do liability want very expensive battery batteries as a QX. in And plus see that very we a that I'll lot they trying for store, in of we a first all, mild product mostly much that March. to start shipments will distributors pricing. they relatively life, not then that fact the shipped I'll start to the to of take they at and battery end these that the mostly had and of to happening but to expensive fact it's financial of also as them, minimize for about not reporting installation do because talk product they can the QX, into inventory of large the kind going a shelf it's

shipments by especially get in in would that were in in reason. a in of that someone you're know most months, such it's see way, we European, that and Europe, they QX Why can inventory, most that they the the expensive down an X for of up the shipments are QX if X Europe two battery were So and -- it product. batteries have if for inventory or they hold when days, battery within

thing again they lot by consume inventory of QX, in year, they it They do. that with bought of the batteries first a So they QX, in that's the simply the low and buying start in remain they end QX.

first thing. So that's the

quarter. our is revenues the more usually of fact tilted towards again, are because the thing of that the the second and of of The the that, because reduction prices end

let's a million. If around business, Europe that you take was approximately say $XXX quarter this

though say, take million exactly just reduce the the the million, same. going away the are you'll XX%, is but see again, $XXX from shipments quantities price, about $XX So even let's same that

major clearing last So end its the nature influential, let here seasonal is two We know it's takes going the but again, important. deliberately less these inventory. will more course the slowdown. thing the into of It's which be you also areas. And year, of it's the

these that that think turns to they make that going it's inventory good time a distributors sure policy I fastly see. our to would high are to like

Operator

from question of with Gosai next our take will We Dimple America. Bank

Dimple Gosai

So a couple of questions.

European in Just what write-down, the than to That's could going was a we Europe, when that component what I back about versus further part the what that scenario get And didn't try inventory to [indiscernible]. component first it question. And right? think The written the I and in off, part, of domestic kind how of value U.S. just expect sold right? the write-down, to think write-downs? realize second inventory do To we relates the or right? the inventory higher proportion can the makeup adds of about square that extent

Ronen Faier

expect we of from did, all, do are but in an expect we do and answering the So aspects needed, your rentals -- the believe, of the inventory not if division. to is solar of first inventory of -- question those write-downs we direct I'll by write-down, that see what start me not not saying and please I'm all inventory more we

result of the Now a write-downs were aspects. following the basically

inventory to because And the fact bit bit, we the is little see First we certain decided these may is of a that time see a will cost not it, that we're kind than we means that anticipated. see basically we're reducing but a changing, little within demand going sell This are such, we that demand of as be the because we by are European that the it's is what we as we and the It basically the we least see off prices going absence. to at of goes expect to to slower that we that a all, period, that of assuming down least reducing it call at in see not inventories do write do we're inventories European obsolete. away. market, not that -- decided

because places, inventory expect installations we sizes again, of they sales to to that in that in to we value continue to or not simply part, the specific second that certification inventory provide the are higher costs. that of they start The customer, require see units given prices kind actively have today, competitive that the of offers see promote some we will those and of maintaining these fact support less

the to we say again, So -- then down that today these, issues of and U.S., I obsolescence. see did say you in now maybe we content do. And reduce would feel the we are a we case. the in fast to have there content not this also the that TPOs see three we if more related already fact see will that selling see is on by that, of we two of the Europe we that the cost all of far what that dictating do needed that indeed, -- as especially batteries, of that mentioned, to and shorter. inventory, QX, a be is that the this rid or in would we where I bit be cost get pricing little they means starting that nondomestic way, will take We move what to below in saw product something that higher. that consumption some the cost, may very the not or compared towards related were the because any do we is see, to batteries inventory domestic thought we only competitive comes and items obsolescence think that here we quarters

of would content So again, here. that the we did was, we even feel relatively not impact the everything that of half I domestic say, but large,

that not prices prevail, the we're we think off. below that amount believe will and the that and And the the wrote obsolescence we write-down looking at that that of came sell cost. I prices fact inventory to comfortable most from going with the feel we of

Operator

our question Citi. Bagri next Vikram We will take from with

Vikram Bagri

gross mid-XX% announcement to $XXX being in saw of went of to impact pull get pretty And then reductions generate announcement pricing pricing One to it this sell-through effect you you I to margins? given headwind down do $X understand much "drastic XX%. your revenues. immediate that, now products" XXXX a maintaining declining, distributors. pricing, on enough again. quarterly capacity same the We sounds clarification can XQ sounds of versus full about with does on by recent Europe previously need like comments about billion reflects How It million generate the what I'm like especially the was what the in revenues not. And of it are believe level does retained some the XXXX related topic, capacity levers but to you of on there, price manufacturing [indiscernible] your still from you once trying

same question putting around on uncertainties On are a same you Ronen, target of there. OpEx. a mentioned the and OpEx there topic, lot

back target is Is there? in count? OpEx percentage a levels get to do how is of like are a of thinking tough. OpEx Is are sort And you target outlook like of Is Going a there a somewhat the you you terms there OpEx prewar How revenue sort there thinking How given of about as target? uncertain. revenues? about head target? of

Ariel Porat

didn't shorten think all the not response QX. mentioned of were reflected your that at Basically, we try to my as price I'll in you I reductions I -- Well, time. to them we question, as look the --

reductions Of ones, course, only mentioned, reductions the in promotions price the -- and we reduction had price launched actually in and but price Ronen promotions as QX big week. last Europe were

QX in of they're reflected not course, numbers. the So

Ronen Faier

the longer looking the $X no other almost that not NPI Sella way, see back And our a that Vikram, ahead, included we billion we it's becomes inventories. we it that factory, footprint Europe capacity, billion Mexico basically manufacturing and exist. we It party separate or existing, the have is now, right using longer but but still use longer X [ factory, to included until for factory are is ] we $X which capacity. in no have a no had that the Vietnam in we China areas. and third includes growth basically the and still nonexistent it When by we We did

how IRA sense, because for to have impacting So going benefit at not going compared that margin, determined also percentages of by much in much to would this get. the States billion. I very the the gross we're being we're very is say that to that approximately sell in be $X longer infrastructure United much going XX% the we Europe to do

level be, lower not again, that a to we number. would developing as discussed should in and be market a 'XX that something achieved. smarter that we at mix a believe, because say to that XX% able little to things the if I Again, of that, be point certain could bringing we course a are If So giving be a I course, this now. the hard need at the we'll would be when in profitable. And and I U.S. company, the to that trying we're breakeven, to of like, us OpEx, reach to Europe, is but how at the believe looks of not is see number how it I I we're of OpEx $XXX margin is bit know once the gross before exactly be looking right say do at understand still million,

a not we number sure So again, I now. right this I'm but look, have something is that that

Operator

the that And we will back program time now any CEO, reached Ronen to it appears additional turn for our closing have I questions. for Faier remarks. allotted or

Ronen Faier

much. Thank you very

call taking, last for that I company back I more solar always market that interesting, we like We interesting thank and stay would evening. and you our progress today. happy the its over be our know that been Thank of very we'll the continue So informing measures trajectory. you We're a it's very to on focused committed to think you today, them joining to good updating very journey. and happy have safe and explain all the been bringing the has all days, to and much, we're of to we're growth the few on

Operator

Thank does for participation. This your you conclude presentation. today's

disconnect at may time. any You

SolarEdge (SEDG) 6 Nov 242024 Q3 Earnings call transcript